Posts tagged crowdsourcing

It seems like everyone and their mom is doing a crowdfunding campaign …

“Coolest Cooler earned $13 million on Kickstarter.”

“Hour of Code made 2 and a half million dollars with Indiegogo.”

“Did you know UNYQ raised more than 2 million through crowdfunding?”

Chances are, you’ve heard stories like these. It seems like everyone is trying Kickstarter or Indiegogo. It seems like such an easy way to get seed funds for a new business, or to get word out about a new product. However, in reality, crowdfunding campaigns take time, effort, constant engagement, and often a financial investment.

So before you dive in to a crowdfunding effort, ask yourself a few questions:

How large is my fanbase and my social media presence? Assume that less than 10 percent will share your message, and much less than 1 percent will donate.

How much lead time do I have? It’s best to have at least 6 weeks to prepare — raising those social media follower numbers and building hype for your product are the two main objectives.

Do I have the time and resources to devote my attention to a crowdfunding campaign for at least 21 days?

What products or services would I provide in exchange for donations? Be sure to allow yourself plenty of room: the platform will take a 4-9% cut and credit cards will take an additional 2-4%. Be sure to factor in shipping costs–a good rule of thumb is that the cost to you of the reward and shipping should be less than half of the donation. Otherwise, with incidental costs and marketing, you might actually lose money in your rewards!

See? It’s pretty complicated!

A crowdfunding stress test

With high risk comes the potential for high reward, but not all companies can afford to take big risks. There is, however, an alternative way to test your messaging and interest in your product before you launch a full camapign.

During a crowdfunding campaign there are different tiers of rewards based on the donation level. Some of the tiers might be the product itself, but others might be stickers or other types of branded merchandise. One of the most popular rewards is a T-shirt with the company’s name or a clever message related to the mission of the campaign.

Instead of doing an entire campaign for a range of different rewards, use the T-shirt sales site, TeeSpring, to sell only this one reward and test the reception to your idea.

Since TeeSpring handles the shipping and collection of money, taking a small cut from your T-shirt sales, it is an incredibly low risk–some would argue no risk–way to test the crowdfunding waters and to validate your product idea. TeeSpring is a very simple-to-use site popular with fundraisers, but a clever team can use it as a testing ground for a larger crowdfunding campaign.

Not every product will be suited to solo T-shirt sales–for example, if you’re selling a utilitarian product that doesn’t inspire a great passion beyond an appreciation for its convenience, then selling a shirt with its picture will require more marketing effort. However, if you are trying to start a magazine to inspire young people to enter STEM careers, you will probably trip over willing donors, especially if you have a clever slogan.

Testing the market through T shirts

In a moment, I will provide a detailed guide to setting up a campaign but first let’s cover some of the opportunties.

When marketing your TeeSpring Campaign, you can track your clicks through a service like bit.ly that creates unique shortlinks. This will track a user’s location, where the link was shared, how many clicks came from your shares and more. You can then use this information later to draw further conclusions about your target demographics.

Share your test through all of your social media channels — even LinkedIn can be a great source of traffic, especially within related groups. Don’t just share where you think your customer might be — you might have misjudged who they are or where they hang out online, or the T-shirt might be purchased as a gift.

If you hired your own designer, encourage them to share the T-shirt, and be sure to pass along praise to her. You can even use giving her credit as a good excuse to share the T-shirt to design forums or fashion communities like select subReddits.

Drawing conclusions about your product

Before your campaign is even complete, you should be using the results of your sales to draw conclusions about your customer and demand for your product.

Who is buying your T-shirts — and are they supporting your cause because they believe in it, do they just like the shirt, or do they want to promote a friend or local business?

Don’t be afraid to ask a few people why they purchased a shirt through social media channels. And if there’s anyone you thought would buy a shirt, but didn’t, ask them why they made that decision.

Also of interest is who shared your message. Consider signing up for Mention to track any… mention… of your campaign. Are there a group of individuals who are sharing the shirt but not buying it? Be sure to ask many of these people why they didn’t purchase.

Some of the reasons that people didn’t buy will not be related to your product — maybe they didn’t trust the website with their credit card, or they didn’t like the color of the shirt–but others reasons will tell you a lot about your brand. One reason might be that they didn’t want to be associated with your brand, which might be difficult information to glean if you first identify yourself as the creator of the shirt! Try to distance yourself from the shirt when asking questions along these lines. “I didn’t design this shirt, I don’t know what to think of it,” could be a good half-truth to use in this situation.

What type of people do not want to display your logo? How do they differ from the people who would proudly blazon your name across their chest?

Another technique is to run two different campaigns simultaneously: one written for a certain audience, and the other written to another, but each with identical shirts. If you perform this jerry-built A/B test, you could see what sort of copy appeals. Combined with carefully tracked bit.ly links, this will also tell you who prefers which copy.

After the campaign is complete and the shirts have been mailed, be sure to comment whenever someone displays their new shirt online!

Setting up a TeeSpring campaign

TeeSpring allows you to set the price of the T-shirts you’re selling, as long as you set a sales goal. If you set a high sales goal (and meet it) you have the opportunity to make more money–because of economy of mass production. However, if you know in advance that you’re only going to sell to one classroom of parents, you simply set the sales goal low and the price of the T-shirts accordingly becomes higher.

TeeSpring’s sales platform is incredibly easy to use and has a short setup time. It provides you with an attractive landing page to display your shirts with a unique URL. TeeSpring takes credit cards and PayPal. You can have sold your first shirt within a half an hour from now, but please, read on for further advice before you set up your shop!

I would recommend that you get a graphic designer to help you create a unique design for your T-shirt because it will improve sales. You can find one through Dribbble, or do a contest through 99Designs.

That being said, it is also possible to create a professional-looking shirt using TeeSpring’s T-shirt designer, especially if you’re doing a text-only shirt. From the main page, click “Get Started Now” and enter your text into the designer, or upload your unique design directly.

Designing a T-shirt is TeeSpring is a quick and painless task.

You’ll also need to choose a T-shirt style. It doesn’t matter too much, but softer shirts are more ‘in’ and if your target market is socially-conscious, you might want to choose an American Apparel shirt. Use the base price as your key metric, though. (Pro-tip: if your shirts are for women, be sure to place your design at the appropriate height even on the men’s shirts, as they will appear at the same height on each unless you create a second campaign.

Setting a price can seem complicated, but spend a while exploring your different pricing options and you’ll be fine.

Next, use the green slider to set the minimum number of T-shirt sales, which will then reflect your net profit should you sell the T-shirts at the suggested retail price. This price might seem a little high, so play around with both the price and number of shirts until you find an appropriate balance.

The copy portion of your TeeSpring campaign

Finally, you’ll want to fill out the text that goes on this page. This information can be edited later, so don’t worry about making a permanent mistake. Have a short, snappy campaign title, and go more in depth about your product and cause in the description. If you’re selling T-shirts to promote another product or service, be sure you are as descriptive as possible about them, including pictures, links, and any release dates. When adding tags, think about what your target audience might search in Google for, and use that as a guideline. Then, set your campaign length and your URL, and you’ll be ready to go.

You will be able to collect your profits 48 hours after your campaign ends, via a check, bank deposit, PayPal or Payoneer.

Buying incremental bits of people’s time, talent, and experience through “crowd-sourcing” is an incredibly important trend, yet it’s s still flying under the radar for most companies.

To learn more about this development, I attended a crowdsourcing conference and learned from experts from GE, Microsoft, eBay, NASA and other leading companies. The conference was created by {grow} community member David Bratvold and his company Daily Crowdsource. David did an excellent job bringing together cutting-edge thinkers in this space and unearthing the vast opportunities … and controversies … surrounding this trend. Here are a few highlights from the world’s crowd-sourcing experts:

Stephen Shapiro, author of Best Practices are Stupid, talked about the echo chamber of innovation facing most companies who don’t look outside for ideas. “Expertise is the enemy of innovation,” he said. “People return to the same safe grooves in their brain. In a room full of rocket scientists, adding one more rocket scientist is probably not going to make a difference. Breakthroughs come from different domains of expertise, connecting ideas and perspectives that were previously unconnected.”

Bryan Saftler of Microsoft covered three possible negatives of crowd-sourcing:

Ownership rights. How do you know somebody creates something original when it may not be?

Crowdsourcing is an open process — do you want your competition to see it?

Crowd-sourcing the wrong thing. R&D should probably be an internal activity if you want a competitive advantage. Should be a discrete problem, not an open-ended problem.

There was quite a bit of debate over this last point, as other participants argued about the benefits of putting R&D problems out to the crowds, including …

Jason Crusan of NASA – NASA is using crowd-sourcing extensively to solve problems ranging from long-term space food packaging to component design for the International Space Station. He said that the key to extracting extreme value from open innovation is tied to generating a vast number of solutions — you can’t get to the “long tail” of break-through thinking unless you get a large number of responses. As this field progresses, the challenge is sorting and finding that superior solution. Software is being developed to manage this.

NASA is running many open-ended “competitions” to generate ideas with cash prizes for the best solutions. The key to success is very carefully defining what needs to be solved. 85 percent of the solutions they’ve found have come from innovators outside the U.S., making NASA a world space agency. NASA has been so successful crowd-sourcing solutions to complex problems that it is now teaching other agencies such as Medicare how to use these strategies.

Max Yankelevich of Crowd Computing Systems — How do you tap into the “cognitive surplus” of the world, and your own employees, beyond mundane micro-tasks? Artificial intelligence promises to take crowd sourcing beyond commodity tasks like photo tagging and sentiment analysis and move into more complex large-scale tasks. “We are heading to a freelance economy,” he said. “And this will be enabled by algorithms. With the application of AI to crowdsourcing, eventually there will be no limit to the complexity of the tasks that will be able to be crowd-sourced.”

Dori Albert of Lionbridge showed how even highly sensitive projects are opportunities for crowd-sourcing. Technology has progressed so that even secure data — like tax forms — can be processed through crowd-sourced models. Data forms are broken up into snips that are sent out so that no single person can see data from the same form — information is transmitted out of context. Every piece of work is sent out to two different people (dual sourced) to provide over 99.9% accuracy. The work (or “snips”) are then re-assembled into the original tax forms and sent back to the state governments in a form that highlights problems and under-payments.

The primary benefit is that state tax entities have cut their tax form processing costs by 50 percent and collected millions of dollars in additional taxes by more thoroughly identifying under-payments.

Dr. Lisa Kennedy, Chief Marketing Officer of General Electric’s healthymagination program showed an example of a 15-year-old boy who invented a diagnostic tool for pancreatic cancer. Innovation is happening in the most unlikely ways, in the most unlikely places. “Innovation is being democratized,” she said. Very sophisticated tools and datasets are available for anyone to use for their own investigations and experiments. Crowd-sourced healthcare breakthroughs are occurring in bio-engineering, cancer research, treatment, imaging, and diagnostics.

GE has created the healthymagination toolbox to put information in the hands of “garage inventors.” MedStartr is a crowdfunding site for life sciences ideas. GE wants to help inventors use big data to solve problems. “Let’s face it,” she said, “your local pizza parlor is probably doing a better job using data analysis to learn about you than your doctor.”

James Rubinstein of eBay talked about the need to do intense research on your customers by asking the right questions. eBay uses crowd-sourced workers to help tag products and refine search terms with search results. The trick is, finding the right workers with the right skills to be effective. He gave examples that showed how search keywords can have wildly different meanings in different parts of the world. Frame of reference is also important — People who love fashion are the best people to match to fashion-related projects. Constantly testing to make sure they have the right workers on the right projects is essential to crowdsource success.

Stephen Paljieg, Senior Market Development Manager for Kimberly Clark said that “Ideas area limited by the people in our company, the experience in our company, and the budget in our company. Yet ideas are abundant! We can liberate the brand promise by opening up our future to our customers.”

The company’s Huggies brand sponsors crowd-sourced innovations from their “mom” customers. “There are more than 6 million women entrepreneurs in the U.S. yet less that 3 percent of venture capital goes to women-owned businesses. We see this as a huge opportunity.” The Huggies brand is experimenting with a mom-funding effort to provide grants to customer-inspired new businesses. “Not only are we driving innovation, we’re showing that we are willing to invest in our customers.”

The company has created goodwill and PR with the program but has not yet created a product that can be sold through Kimberly-Clark.

BONUS CONTENT

I had a chance to catch up with Clint Bonner, VP -Marketing for Top Coder, for an interview. With access to 450,000 resources in 200 countries, Top Coder has become a leading crowd-sourcing resource for many top brands. How do you manage 450,000 resources? What is the opportunity for smaller businesses? Let’s find out in the brief video interview:

I’m delighted to present today eight exciting new mini-case studies which demonstrate the power of social collaboration to create business value through new product development. These were curated by Amy Kenly and her team at innovation consulting firm Kalypso (Amy will also be a speaker at the April 27 Social Slam event!)

I think you’re going to be energized by these inspiring ideas!

Business Challenge: Getting real time analysis of which future candle scents customers would be most likely to favor.

Project Details: Instead of relying on traditional market research and trend analysis, Diamond Candles developed a way to crowdsource idea submission and voting from their existing customers. The company then takes the top 10% of voter suggestions and cross-references that with market trend analysis to make final decisions on new scents to launch.

Results: The program received more than 250 new product ideas and 5,000 customer votes in just one month. This has established a plan for the company’s R&D efforts.

Business Challenge: The Coca-Cola unit wanted to utilize Vitamin Water’s Facebook fanbase to design a new flavor.

Project Details:Vitamin Water’s flavor “Connect” was developed by the company’s Facebook fanbase; one Facebook fan won $5,000 for her role in development of the new flavor. The competition allowed VitaminWater’s Facebook fans to develop all aspects of the product, from selecting the flavor to designing the packaging and naming the product.

Results: More than 2 million VitaminWater Facebook fans participated in the new product development effort.

Business Challenge: Identifying a biomarker for ALS (Lou Gehrig Disease), a progressive and fatal neuro-degenerative disease.

Project Details: Working with the online crowdsourcing organization InnoCentive, Prize4Life launched a $1 million challenge to find an accurate way to track the progression of ALS and reduce the cost of ALS clinical trials. At least 50 teams competed from 18 different countries. Prize4Life’s Scientific Advisory Board voted to award the ALS Biomarker Prize to Dr. Seward Rutkove. As a result, Dr. Rutkove’s work has been accelerated and gained the attention of researchers from around the world.

Results: Using the biomarker discovered by Dr. Seward Rutkove reduced the cost for a clinical trial by 50 percent or more. As a result, the time required to determine the therapeutic benefit of a given drug in a clinical trial is shorter and requires fewer patients. This translates to potential therapies moving more quickly through the development pipeline, accelerating progress towards a treatment or cure for ALS, and creating incentive to invest resources in ALS drug development.

Business Challenge: To develop effective new ideas that address childhood obesity by increasing physical activity in “tweens.”

Project Details:HopeLab, a nonprofit organization, created a competition called Ruckus Nation to address childhood obesity by using the global social web to generate ideas for products that will help kids stay active.

Results: HopeLab received more than 400 entries from 37 countries and 41 U.S. states. In tests conducted by HopeLab, many of the ideas submitted have displayed strong potential for HopeLab’s product development efforts and six ideas resulted in patent applications.

Business Challenge: Develop products that solve customer problems, meet a need or increase efficiencies, on a limited research & development budget.

Project Details:Madison Electric’s commitment to innovation led the company to launch the Sparks Innovation Center- the industry’s first crowdsourced, collaborative approach to product development. Through their website (www.meproducts.net/sparks), anyone is invited to submit ideas for new products. The Madison Electric team assesses each idea’s merit, and the best ideas are then presented to a focus group through the company’s online Contractor Forum.

Results: Generating nearly 100 submissions thus far, the Sparks Innovation Center has been the point of origin for five profitable new Madison Electric products and another four are currently now in the production phase. The center has evolved into a go-to resource for inventors and aspiring entrepreneurs in the electronics industry.

Business Challenge: Managing resources throughout multiple time zones, geographies and languages to deliver new products and version releases.

Project Details: To address the challenges in managing a far-flung internal development staff, CDC Software relies on social network technologies to develop and deliver software from teams around the world. These social technologies are used at each step of the development process, including the commercial effort.

Results: CDC cut the time of product delivery from 24 months to 12-16 weeks. These cloud-based social technologies have promoted tight collaboration among their R&D offices across 14 countries, streamlined knowledge transfer and cut costs.

Business Challenge: Accelerating time to market and time to revenue generation.

Project Details: The Cisco Enterprise Collaboration Platform Business Unit (ECP BU) is a cross-functional development group that included team members from program management, product management, user experience, engineering, quality assurance, and their executive sponsors. This team used an internal social platform to create a collaborative community and integrate their work processes and achieve rapid product iterations.

Results: The team delivered its first major release within 12 months, a reduced product time to market that equated to an average 12 percent productivity gain per employee, or 28,000 labor hours.

Business Challenge: Leveraging knowledge and ideas beyond the company walls to develop new power grid technologies.

Project Details: In 2010, GE announced the Ecomagination Challenge, a global contest that was an open call for power grid innovations. Together with top venture capital firms, GE committed up to $200 million to help entrepreneurs develop their ideas and bring them to market. $100,000 awards were offered for each of five winning ideas along with the potential to collaborate with GE and its VC partners. Ideas were routed to subject matter experts and a final panel of judges to determine the winners.

Results: The Ecoimagination Challenge website had 70,000 participants from more than 150 countries, contributing 3,844 ideas and more than 120,000 votes. Twelve projects were selected to partner with GE and received development funds totaling $55 million. The contest’s most popular submissions received a $50,000 cash award and GE also granted $100,000 each for five promising products ideas.

So there you have it — some really awesome examples of social networking and global collaboration. What had an impact on you?

As buzzwords go, “crowdsourcing” may not be as big as “social-media” or “mobile apps” but new research show it is one of the most rapidly-expanding trends in our field.

Crowdsourcing represents an epic shift in the world of labor, automation, and information science, one with large economic and ethical implications. Everybody is looking at this trend and wondering, “How big is the market?” “How fast is it changing?” and “Which companies should I be working with?” So the Daily Crowdsource is beginning to explore some of those questions through original research.

To answer these questions accurately, we took the last three months to perform a thorough analysis of enterprise-grade microtasking vendors and produced a market report. We chose the ‘microtasking’ sector to start with because it’s one of the two sectors that enterprises can benefit from the most. Here’s what we found:

If you’re wondering why Amazon’s MTurk isn’t on the list, it’s because they operate quite differently than the evaluated providers. MTurk, though one of the largest and most well-known suppliers of microtasks, lacks the quality & validation checks that enterprise clients require. Although enterprises can develop their own quality-assurance system in Mturk, the value of sophisticated, field-tested algorithms far outweigh the cost increases associated with using one of these other six quality-focused platforms.

The market demand for crowd-sourced work quintupled in 2010 & almost quadrupled in 2011:

Despite being around for six years, the microtasking field was in the testing phase for the first three years. Several platforms were revamped, relaunched, or finally “released” in 2009. Client adoption was also slow until 2009 when the first surge in market demand occurred. Last year, the number of completed microtasks increased 496% over 2009. The number of tasks completed in 2011 is estimated to increase 355%

Despite this quick growth, the field is still in its infancy. How quickly it will mature is yet to be seen. Is this growth sustainable? One clue to this answer is that microtasking has yet to be adopted by many large companies. This rate of adoption is also increasing so 2012 could be another years of explosive growth for this nascent industry.

With the growing importance (and controversy) of microtasking, it’s critical that we start measuring and understanding these trends. This is the first of what I hope will be a series of research efforts to understand this business model.

Have you experimented with crowdsourcing yet? How could you use it?

David Bratvold is the founder of Daily Crowdsource, the #1 site for crowdsourcing news, training & resources. His goal is to educate business professionals on the benefits of crowdsourcing. He will present more of his findings at Social Slam 2012.

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